Bharti Airtel Africa Data Growth to Quicken on Smartphones

Bharti Airtel Ltd. (BHARTI), the Indian wireless company with operations in 17 African countries, said data usage on the continent will accelerate after more than doubling in the year through June.

“We do not expect this rate of growth to show any significant change in the short-to-medium term,” Andre Beyers, chief marketing officer of Nairobi-based Airtel Africa, said in an Aug. 23 response to e-mailed questions. “If anything, with the further increase in smartphone penetration, our continuous expanding coverage and some more exciting products, this growth rate might even further improve.”

Mobile-phone users in urban Africa are turning to data because of falling prices of Internet-enabled handsets, according to research by McKinsey & Co. About 25 percent of smartphone owners in Africa access the Internet daily and more than half at least once a month, the company said.

“We have seen tremendous growth in most of our markets, but the growth in markets such as Nigeria, Tanzania, Uganda and Burkina Faso is really pleasing,” Beyers, 48, said. “Our efforts to increase the access to and affordability of data is showing good returns.”

Airtel’s African data-subscriber numbers jumped 65 percent during the 12-month period to 15 million customers, Beyers said, while data use advanced about 150 percent. Revenue from data services made up more than 5 percent of the African unit’s total sales for the first time, he said.

3G Deployment

As part of plans to meet growing demand for data services among its customers, Airtel Africa has been deploying high-speed Internet capacity known as 3G across its African network and so far 14 out of the 17 nations have speeds of as much as 42 megabits per second, Beyers said.

Airtel Africa is the third-biggest operator in Nigeria, Africa’s most populous country, with 21.6 million customers as of June, according to the Nigerian Communications Commission. That compares with 18.6 million in April 2012. The company is the second-largest operator in Kenya behind Safaricom Ltd., a unit of Newbury, England-based Vodafone Plc.

Bharti Airtel, which started operating in Africa in 2010, made a net loss of $106 million on the continent in the three months through June, compared with a loss of $124 million in the same period a year earlier, the company said on July 31. Sales declined for the second consecutive quarter. Airtel is planning to reverse the trend by targeting a growing number of smartphone users in Africa to boost revenue per user and reduce dependence on traditional fixed-line services.

Bharti Airtel is India’s biggest mobile-phone company with more than 269 million customers across 20 countries in Asia and Africa, according to its website. The company’s shares fell 1.9 percent to 288.30 rupees by 2:47 p.m. in Mumbai, extending a decline for the year to 8.7 percent.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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